Novell continues strong comeback; EPS gains in quarter

CBS.MarketWatch.com

SALT LAKE CITY (CBS.MW) -- Novell recorded a rise in third-quarter profit, as expected by analysts, announcing after the market closed that it earned 14 cents a share.

Analysts expected the company to earn 13 cents per share.

As the company's remarkable comeback continues, net income nearly doubled to $49 million, or 14 cents a share, from the $27 million, or 7 cents, notched in the year-ago quarter.

Revenue in the quarter jumped 20 percent to $327 million from $272 million in the same period a year earlier. Morgan Stanley Dean Witter analyst Chuck Phillips projected sales of $325 million in the period.

Since Eric Schmidt took over the company
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more than two years ago, he has cleaned out the sales channel, stanched the flow of red ink and narrowed the product lineup.

All of this has helped Novell turn itself around, and shares have tripled under Schmidt's watch (see chart above).

During the quarter, sales from NetWare server software came in at $175 million, a gain of 27 percent from last year's third quarter.

The pace of new-product deliveries increased during the solid third quarter, including delivery of Novell's Single Sign-on security management product.

The company stated in a press release that it plans to bring new software products to market between now and the end of fiscal 2000 to address e-commerce infrastructure, quality of service, caching performance and more.

Shares closed down 3/4 at 24 7/8 Thursday, with more than 5 million shares trading hands.

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